With high demand nationwide for talent in major metro areas—as well as in many secondary and tertiary markets—construction salary gains continue a steady rise. Among firms that expect to offer raises, anticipated increases could average 3.41% this year, according to data from the 2017 Construction/Construction Management Staff Salary Survey produced by Personnel Administration Services Inc. Firms typically underestimate hikes by as much a 0.5%, so they actually could hit closer to 4%, says Jeff Robinson, president of PAS, an industry compensation specialist.
Salary increases at that level would continue a steady rise seen in recent years. Among firms that reported raising salaries, respondents noted average increases of 3.46% in 2014, 3.73% in 2015 and 3.63% in 2016.
Although the rate of average salary increases is steady, Robinson says certain positions are in higher demand than others, particularly in construction operations. Citing base salaries across all firms reporting, he says safety directors saw the biggest jump in this year’s survey, hitting nearly 8%, with big hikes as well for project managers and estimators last year, according to PAS data. “If you’re in a hiring mode, you’ll have to offer something more than average for these positions,” Robinson adds. “It looks like firms have been aggressively going after folks in these selected job families.”
While construction salary growth hasn’t passed 4%—as happened in earlier periods of market strength—Robinson says it still is well above increases in other industries, which average about 3%.
Average compensation also remains rather consistent across the U.S. Last year, the New York and New Jersey region offered the highest average salary hikes at 3.8%, with the lowest—3.4%—reported in the Midwest and Northwest.
“The shortage of qualified people is worse than it was a year ago and it’s going to get even worse. There’s no relief in sight,” says Bob Honour, president of H&H Consultants. He says that strength in the construction market has spread from the major cities to smaller markets across the U.S., making job-candidate mobility an issue. “It used to be that if one part of the world was busy, somewhere [else] was slow, and you could get people to move,” he says. “They don’t have to move to get a job anymore. They only move if they want to be near family.”
Rob Herndon, president of HCC Recruiting Services, also sees field staff opportunities moving from downtowns to the suburbs and neighboring cities. “Outside of these big cities, there are dozens of small cities where companies are based that may have 50 employees,” he says. “People don’t want to have to drive two hours per day to a job. They start like that and they work until they find something better that’s closer—and all of my clients know that.”
As a result, Herndon sees employers putting a premium on field staff willing to work downtown, offering compensation that is 10% to 20% higher. “I see superintendents on these downtown multifamily projects make $120,000 to $130,000 with typical bonus and car allowances,” he says. “Guys outside the city might make $100,000 on a garden-style apartment job and a lot of them take those projects because they are less stressful and more fun.”
Overall, Herndon sees highest demand for superintendents and assistant superintendents, followed by project managers. Such field staff is needed in residential, commercial and institutional sectors, among others. Megan Morris, vice president of Adams Consulting Group, also sees some unwillingness to change jobs. “For a superintendent who has been in a firm more than ten years, the income gap between high-quality assistant superintendents and their own income is closing,” she says. “It’s a great time for high-quality people to leverage themselves, because companies need them.”